Form W-3 Transmittal of Wage and Tax Statements (2020): A Complete Guide for Employers

What the Form Is For

Form W-3 might seem like just another tax form, but it plays a crucial role in making sure your employees' wage information gets properly reported to the Social Security Administration (SSA). Think of it as the "cover sheet" that summarizes all your employees' W-2 forms—it tells the SSA what to expect in the package and ensures everyone's earnings get credited correctly for future Social Security and Medicare benefits.

Form W-3 is a one-page transmittal form that employers use to send Copy A of all their Forms W-2 to the Social Security Administration. It's essentially a summary document that reports the combined totals of wages, tips, federal income tax withheld, Social Security wages, Social Security tax, Medicare wages, and Medicare tax for all your employees for the entire year.

The form serves several important purposes. First, it acts as a quality control mechanism—the SSA uses it to verify that the totals on all the individual W-2 forms you're submitting add up correctly. Second, it provides essential information about your business, including your Employer Identification Number (EIN), company name and address, and the type of employer you are (such as a 941 filer or household employer). Third, it includes state and local tax information that helps coordinate reporting across different government agencies.

Importantly, you only need to file Form W-3 when submitting paper copies of W-2 forms. If you file electronically through the SSA's Business Services Online (BSO) system, the system automatically generates a W-3 for you based on the W-2 data you submit—making the process much simpler.

When You'd Use It (Including Late and Amended Filings)

Standard Filing

For the 2020 tax year, you must file Form W-3 along with Copy A of all Forms W-2 by February 1, 2021. This deadline applies whether you file on paper or electronically. You must also furnish copies of Forms W-2 to your employees by the same date (February 1, 2021). If employment ends before December 31, 2020, you can give employees their W-2 anytime after their final paycheck, but no later than February 1, 2021.

Late Filings and Extensions

Extensions for Form W-3 are not automatic and are rarely granted. You can request only one 30-day extension by filing Form 8809 (Application for Extension of Time to File Information Returns) before the February 1 deadline. The IRS will grant extensions only in extraordinary circumstances or catastrophes—such as a natural disaster destroying your records or a fire wiping out your payroll system. Simply being behind on paperwork won't qualify.

Even if you receive an extension to file Forms W-3 and W-2 with the SSA, you still must provide W-2 forms to employees by February 1, 2021, unless you also request a separate extension to furnish employee copies (which requires a written letter to the IRS, not Form 8809).

Amended or Corrected Filings

If you discover an error on your W-3 after filing—whether it's a math mistake in the totals, an incorrect EIN, or wrong tax amounts—you'll need to file Form W-3c (Transmittal of Corrected Wage and Tax Statements). This form accompanies corrected W-2c forms and should be filed as soon as you discover the error. There's no specific deadline for corrections, but filing promptly helps ensure employees' Social Security records are accurate. The good news is that Form W-3c can be e-filed through the SSA's BSO system, making corrections relatively straightforward.

Key Rules and Requirements for 2020

Filing Threshold Requirements

You must file Form W-3 if you're required to file even one Form W-2. This requirement applies when you paid any employee $600 or more during the year, withheld any income tax, Social Security tax, or Medicare tax from wages, or would have had to withhold income tax if the employee had claimed only one withholding allowance. Even household employers with just one employee must file Form W-3.

Electronic Filing Requirements

For 2020, you must file electronically if you're submitting 250 or more Forms W-2 or W-2c. The SSA strongly encourages all employers to e-file regardless of the number of forms, as electronic filing is faster, more accurate, and helps prevent processing delays. If you're required to e-file but fail to do so without an approved waiver, you may face penalties. You can request a waiver by filing Form 8508 at least 45 days before the Form W-2 due date.

Matching Requirements

The EIN and employer name on your Form W-3 must match exactly what appears on your quarterly employment tax returns (Form 941, Form 943, Form 944, or Form CT-1 for railroad employers). Any mismatch can trigger processing delays and SSA rejection of your wage reports. Similarly, the totals on Form W-3 must precisely equal the sum of all individual W-2 forms you're transmitting—this is one of the most critical quality checks the SSA performs.

2020-Specific Rules

For 2020, several special provisions apply. You can now truncate (partially hide) employees' Social Security numbers on the copies you give to employees, showing only the last four digits (for example, XXX-XX-1234). However, you cannot truncate SSNs on Copy A that you send to the SSA. Additionally, the health flexible spending arrangement (FSA) salary reduction contribution limit for 2020 is $2,750, which you may need to report in Box 12 of W-2 forms with code W.

Step-by-Step (High Level)

Step 1: Gather Your Information

Before you begin, collect all your completed Forms W-2 for the year. You'll need your business's EIN, complete legal name and address, state identification numbers (if applicable), and all the quarterly payroll tax returns you filed during 2020. Make sure all your W-2 forms are accurate before proceeding, as the W-3 must match their totals exactly.

Step 2: Complete the Identification Boxes

Start by entering your EIN in Box e and your complete business name in Box f. Include your full address with ZIP code in Box g. If you used a different EIN during the year (rare, but possible), enter it in Box h. In the contact information section, provide a contact person's name, phone number, and email address—this helps the SSA reach you quickly if there are questions.

Step 3: Check the Appropriate Boxes

Box b requires you to identify the type of payer you are by checking the appropriate box corresponding to the form you file (941 for most employers, 943 for agricultural employers, 944 for annual filers, CT-1 for railroad employers, Military, or Hshld. emp. for household employers). You'll also identify the kind of employer you are (such as None apply, 501c non-govt., State/local non-501c, Federal govt., etc.). If you paid third-party sick pay during the year, check that box as well.

Step 4: Calculate and Enter Wage and Tax Totals

Enter the total number of W-2 forms you're transmitting in Box c. Then, working through Boxes 1 through 19, enter the combined totals from all your W-2 forms. Box 1 is total wages, tips, and other compensation. Box 2 is total federal income tax withheld. Boxes 3 and 4 are Social Security wages and tax withheld. Boxes 5 and 6 are Medicare wages and tax withheld. Continue through all relevant boxes, including state and local tax information in Boxes 15 through 19 if applicable.

Step 5: Review for Accuracy

Double-check that your totals match the sum of all individual W-2 forms. Common errors include mismatched totals, missing decimal points, incorrect EINs, and checking the wrong type of payer. The SSA's computer systems automatically reject forms with certain errors, such as when Medicare wages are less than Social Security wages or when tax amounts are reported but corresponding wages are zero.

Step 6: Sign, Date, and Submit

Sign and date the form in the designated area at the bottom, and enter your title. If you're submitting paper forms, mail the entire page of Form W-3 with all Copy A pages of Forms W-2 to the Social Security Administration at the Wilkes-Barre, PA address. Don't staple, fold, or tape the forms together, as they're machine-read and damage interferes with processing. Keep Copy D of all W-2 forms and a copy of Form W-3 for your records for at least 4 years.

Common Mistakes and How to Avoid Them

Mismatched Totals

The most frequent error employers make is having totals on Form W-3 that don't match the sum of all W-2 forms. This typically happens when you prepare the W-3 before finalizing all W-2 forms or when you correct a W-2 but forget to update the W-3. Always prepare your W-3 last, after all W-2 forms are complete and reviewed. Use spreadsheet software or payroll software to automatically calculate totals to avoid manual addition errors.

Wrong or Missing EIN

Entering an incorrect EIN or accidentally using an employee's Social Security number in the EIN box is surprisingly common. The EIN should match exactly what appears on your Form 941 or other employment tax returns. If your EIN is incorrect, the SSA will reject your submission, and you'll face penalties for late filing. Always verify your EIN against your official IRS correspondence before filling out the form.

Incorrect Kind of Payer Selection

Choosing the wrong box in Box b (such as checking 941 when you should check 944, or vice versa) creates a mismatch with your employment tax return filings. This can trigger IRS inquiries and delay processing. Review your quarterly or annual employment tax returns to confirm which form you filed, and check the corresponding box on Form W-3.

Submitting Photocopies or Downloaded Forms

The SSA will not accept photocopies of Form W-3 or Copy A of Forms W-2, nor will it accept copies downloaded from IRS.gov and printed at home (these aren't scannable). You must use official IRS red-ink forms, IRS-approved software to print substitute forms, or file electronically. If you need official forms, order them from the IRS at least a month before the deadline to ensure they arrive in time.

Stapling or Folding Forms

Because Forms W-2 and W-3 are scanned by machines, stapling or folding them causes processing errors and delays. Forms with staple holes may be rejected. Always mail forms flat in an envelope large enough to avoid folding them, and never staple the W-3 to the W-2 forms or staple W-2 forms together.

Including Payments

Some employers mistakenly send checks or money orders with their W-2 and W-3 forms, thinking they're paying employment taxes. Never send payments to the SSA with your wage reports. Employment tax payments are made separately to the IRS, not to the SSA. Form W-3 is purely an information report.

What Happens After You File

SSA Processing

Once the SSA receives your Form W-3 and Forms W-2, they scan and process the information. The SSA's computer systems perform automatic quality checks, including verifying that W-3 totals match W-2 individual amounts, that Medicare wages aren't less than Social Security wages, and that tax amounts align with wage amounts. If the forms pass these checks, the information is entered into each employee's Social Security earnings record, which determines their future Social Security and Medicare benefits.

IRS Sharing

After processing, the SSA shares the wage and withholding information with the IRS. The IRS uses this data to verify information on employees' individual income tax returns (Form 1040). If an employee's tax return shows significantly different wage amounts than what appears on their W-2, it may trigger an IRS inquiry or audit.

Error Notifications

If the SSA finds errors during processing, they'll notify you by mail or email. Common rejection reasons include mismatched totals, missing information, invalid EINs or SSNs, or forms that can't be scanned properly. You'll need to correct the errors and resubmit corrected forms (W-2c and W-3c) as soon as possible. Don't write "corrected" or "amended" on resubmitted forms—just correct the information and resubmit.

Confirmation

If you file electronically through the BSO system, you'll receive an immediate confirmation receipt showing your forms were accepted. Print and keep this confirmation for your records. If you file paper forms, you won't receive confirmation unless there's a problem—no news is good news. The SSA typically processes paper forms within a few weeks but may take longer during peak filing season (January through March).

Employee Records Updated

Approximately 2-4 months after filing, employees can verify that their earnings were properly reported by checking their Social Security Statement online at ssa.gov or requesting a statement by mail. If employees notice discrepancies, they should contact you first to request a corrected W-2c.

FAQs

Q1: Do I need to file Form W-3 if I only have one employee?

Yes. Any employer who must file Form W-2—even for just one employee—must also file Form W-3 to transmit it to the SSA. This includes household employers who pay a nanny, housekeeper, or caregiver more than the household employment threshold ($2,100 for 2020). Simply check the "Hshld. emp." box in Box b to indicate you're a household employer.

Q2: Can I file Form W-3 without the W-2 forms, or W-2s without the W-3?

No on both counts. Form W-3 is specifically a transmittal form—it has no purpose without accompanying W-2 forms. Similarly, the SSA requires Form W-3 with all paper W-2 submissions to provide summary information and help with processing. If you file electronically, the BSO system automatically generates a W-3 based on your W-2 data, so you don't need to worry about filing them separately.

Q3: What happens if I miss the February 1 deadline?

You'll face penalties that increase the longer you delay filing. For 2020 forms filed after February 1, 2021, penalties range from $50 to $280 per form depending on how late you file, with higher penalties if you intentionally disregard the filing requirement. The penalty applies to both late W-2 forms and the W-3. File as soon as possible to minimize penalties. Additionally, employees may face difficulties filing their personal tax returns without their W-2 forms, potentially causing tax refund delays for them.

Q4: Can I file Form W-3 for one state and separately for another if I have employees in multiple states?

No. File one Form W-3 that includes all Forms W-2 for all employees regardless of their work location. The W-3 reports totals for your entire company. However, you may need to file separate state-specific forms with each state's tax department, as state filing requirements vary. Copy 1 of Form W-2 is provided for state, city, or local government filing requirements—contact each jurisdiction for their specific requirements.

Q5: What's the difference between Form W-3 and Form W-3c?

Form W-3 is the original transmittal form you file with your initial W-2 submissions for the year. Form W-3c is the corrected transmittal form you use when you discover errors after filing the original and need to submit corrected W-2c forms. The W-3c shows both the previously reported (incorrect) amounts and the corrected amounts, making it clear what's being changed. You can file W-3c anytime you discover an error—there's no statute of limitations on corrections.

Q6: Do I need to send anything to the IRS, or just to the Social Security Administration?

For Forms W-2 and W-3, you send them only to the Social Security Administration. The SSA shares the information with the IRS electronically. However, you separately file your employment tax returns (Form 941, 943, 944, or CT-1) and make tax payments directly to the IRS. These are different processes—Forms W-2 and W-3 are information reports sent to the SSA, while employment tax returns and payments go to the IRS.

Q7: What should I do if I used a payroll service—are they responsible for filing Form W-3?

While many payroll services will prepare and file Forms W-2 and W-3 on your behalf as part of their service, you as the employer remain legally responsible for ensuring accurate and timely filing. If your payroll service makes errors or files late, the IRS and SSA will hold you accountable and assess penalties against your business. Always verify what your payroll service provider is filing on your behalf, review forms for accuracy before submission, and keep copies of all filings for your records.

For More Information

For more information, visit the official IRS page for Form W-3 or download the 2020 General Instructions for Forms W-2 and W-3. You can also access the Social Security Administration's Business Services Online at SSA.gov/employer for electronic filing options and helpful resources.